Gold Price Outlook – Gold Breaks Even Higher on Thursday

Gold Technical Analysis

The gold market has rallied a little bit during the trading session on Thursday as it is now above the $4,200 level. This is a significant breakout and it does look like traders are trying to get to the $4,400 level. It will be interesting to see whether or not the market will continue to rise the way it has. There is a situation where market participants have to be very cognizant of the fact that the last couple of days have been a little overextended.

This is one of those scenarios where shorting the market is not desirable, but chasing it may not be wise either. The idea of chasing a roughly 10-ish percent change in just a couple of quick days in an asset that spends most of its time drifting is not appealing. Short-term pullbacks could be buying opportunities, but if the market gives back the $4,000 level, that would be really bad news. The good news is that the level is about five-ish percent below here. The question now is whether there was distribution with the huge run-up in volume and then the sell-off. The answer will be clearer if the market cannot make a fresh high, and it is right at that point.

It is almost a market that is almost impossible to trade at the moment because if it starts to fall off, it would be a very bad sign. All things being equal, if a trade must be placed in gold, buying is the easier route at the moment. But the way it sold off back in late October, especially with that massive amount of volume, remains a concern. Obviously, the trend is higher at the moment, and it looks like it will at least try to continue that.

For a look at all of today’s economic events, check out our economic calendar.